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Report: Black Friday trend driven in part by white lies

VANCOUVER, BC (November 24, 2014) — Ninety-four per cent of local shoppers believe Black Friday prices are lower compared to the rest of the year, even though major retailers may offer little in terms of real savings, according to a new report released today by Vancity credit union.

The report, White Lies on Black Friday: Pricing Integrity in Black Friday Sales, finds that as the American tradition of Black Friday becomes increasingly popular with Canadian shoppers and retailers, with it comes some of the related tactics like inflating original prices, creating a false sense of urgency to buy and encouraging rash decision-making.

Last year spending over the Black Friday to Cyber Monday period increased by 16 per cent among Vancity enviro™ Visa* cardholders, compared to 2012. Further growth is anticipated in 2014 with 1.9 million new Black Friday shoppers and 2.6 million new Cyber Monday shoppers expected in Canada, according to other research.1

Vancity commissioned the report to better understand the Black Friday phenomenon in Canada and how, as a financial institution, it can equip its members and cardholders to make informed purchasing decisions. The report included working with Mustel Group to conduct a survey of Lower Mainland and Victoria residents, which found:

  • About a third of respondents have bought items at a Black Friday sale
  • Respondents estimate that Black Friday prices are an average of 23 per cent lower compared to the rest of the year
  • One in five respondents believe that Black Friday prices are more than 40 per cent lower compared to the rest of the year
  • 76 per cent of respondents believe that retailers are making less profit or losing money on Black Friday sale items
  • 46 per cent of respondents say consumers have to buy things quickly while they are still available.

The report indicates that some retailers set original prices with markdowns built in and a few actually raise the “regular price” of items so they can “discount” them again just in time for Black Friday. “Door-crashers” are also an important tool for retailers on Black Friday, building hype and urgency, attracting crowds of bargain hunters and giving an impression of store-wide bargains. Yet the reality is often a very narrow range of discounts and even products billed as “door-crashers” may not be especially good deals, according to the report.

The report notes that not all retailers engage in these tactics. While small retailers may have Black Friday sales, they generally opt to compete on quality of service to understand and meet local customers’ needs.

The report warns that Lower Mainland and Victoria residents, who may be accustomed to more genuine clearance events such as Boxing Day sales, need to be savvy and cautious when it comes to Black Friday. There are a number of ways for shoppers to ensure they get a genuine good deal and make thoughtful purchasing decisions during sales. Consumers should:

  • Do the research: find the best price, find the right product, use deal websites and apps, bring a smartphone, get advice from knowledgeable friends
  • Time it right: shop before and after Black Friday, don’t limit research to key sale days, check return policies, which can be different during a sale, and keep receipts
  • Think it through: Think twice before buying multiples, don’t plan too far ahead, avoid wishful thinking and, most importantly, don’t get caught up in the deal
  • Understand trends for different products: buy toys and luxury goods closer to Christmas, buy winter apparel and bed linens in the New Year, watch out for look-alike electronics.

Quote:

Mohamed Ladak, vice-president of payment solutions for Vancity
“We’re not saying that good deals can’t be found on Black Friday, but you need to be shopping for final price, not the savings.”

Additional Information:

About Vancity

Vancity is a values-based financial co-operative serving the needs of its more than 501,000 member-owners and their communities through 58 branches in Metro Vancouver, the Fraser Valley, Victoria and Squamish. As Canada’s largest community credit union, Vancity uses its $17.5 billion in assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.

Tweet us @vancity and connect with us on Facebook.com/Vancity.

 

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